The Four Types of Fundraising Mechanisms

There are four basic kinds of fundraising mechanisms: 1.) direct appeals, 2.) grants, 3.) events, and 4.) product sales. Each of these can be effective mechanisms for supporting nonprofit programming. A strategic nonprofit will have a combination of all four to diversify their fundraising.

  1. Direct appeals normally occur annually at the same time of year. Often these are letters mailed to potential supporters, but they can also be in person requests like the red kettles of The Salvation Army at Christmas time, or the popular crowdfunding platforms like KickStarter and Kiva.
  2. Grants are usually a specific amount of money given by an organizations based on a written request that will provide money to support a specific effort.
  3. Events are usually large scale activities that require donors to participate in some activity. They usually require extensive planning and co-sponsorship.
  4. Product sales are probably the most familiar mechanism. A product is sold and a portion of the sale goes back to the nonprofit. Think of all of the school bake sales, auctions, Girl Scout cookies, and t-shirts that are advertised by nonprofits. This is give their particular supporters to get something for giving.